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Muscat: Several threads were woven at the 29th GCC Summit but the final stitch was left for the future as the leaders decided to keep the momentum for economic integration in the region going amid global financial meltdown.
At the end of the Summit on Tuesday, the message was clear that despite some reservations and Oman not being part of it, the Common Currency target would remain.
"The monetary union is approved for today ...," Abdul Rahman Al Attiyah, GCC Secretary-General, announced at the end of the Summit.
"I think it is within the time which has been allocated - 2010, unless there are other developments in the mean time," said Al Attiyah
"Let's wait until, Insha Allah, we agree on the location [of the central bank] and the other details," the Secreatry-General said, adding that the decision on the central bank's location would be finalised by mid-2009.
"The location will be discussed between now and the middle of the year to finalise the place of the headquarters of the monetary council, which will lead to the [GCC] central bank."
So the fabric is in place for the single currency's circulation by 2010 but there are a few finer touches.
Imported inflation
Among the minor issues hampering the decision is where to peg the Common Currency?
The single currency project has had its share of setbacks.
In 2006 after Oman decided it would not join the monetary union. Months later Kuwait severed its currency peg to a then-weak dollar in a bid to fight imported inflation.
And, now except Kuwait all the other members joining the currency union are keen to have the Central Bank in their own country.
There was no official announcement after the two-day Supreme Council meetings but seems most members have agreed to disagree at least on the location of the Central Bank.
As Al Attiyah is optimistic about the decision of the creation of the Central Bank by mid-2009 there will be little time left to work out other details.
When asked about the issue of gold reserve for the GCC Central Bank, Mohammad Al Mazroui, Assistant Secretary General for Economic Affairs, told Gulf News that the time had not come for discussing about the gold reserves. "Let's first decide the location of the Central Bank then the Monetary Council and Bank will deal with the issue of gold reserve."
Gus Freeman, Managing Director of Arabian Research Bureau, said the deferring of decisions on some of the economic integration issues was prudent in the given circumstances of global recession. "Wait and watch is better than rushing and it is only a matter of time before the single GCC currency, a common power grid and railways," he believes.
A financial expert and former Omani envoy to France believes that the GCC leaders have taken steady and sure steps towards the economic integration. "This is a natural progression of the movement that started three decades ago and we have to be one strong group to be counted internationally," said Munir Makki, Managing Director and President of Fincorp, Oman's leading financial and brokerage company.
Makki, who was Oman's ambassador to France and other European countries for over two decades, pointed out that even in Europe they took a long time to form the European Union.
http://www.gulfnews.com/business/Economy/10271599.html
At the end of the Summit on Tuesday, the message was clear that despite some reservations and Oman not being part of it, the Common Currency target would remain.
"The monetary union is approved for today ...," Abdul Rahman Al Attiyah, GCC Secretary-General, announced at the end of the Summit.
"I think it is within the time which has been allocated - 2010, unless there are other developments in the mean time," said Al Attiyah
"Let's wait until, Insha Allah, we agree on the location [of the central bank] and the other details," the Secreatry-General said, adding that the decision on the central bank's location would be finalised by mid-2009.
"The location will be discussed between now and the middle of the year to finalise the place of the headquarters of the monetary council, which will lead to the [GCC] central bank."
So the fabric is in place for the single currency's circulation by 2010 but there are a few finer touches.
Imported inflation
Among the minor issues hampering the decision is where to peg the Common Currency?
The single currency project has had its share of setbacks.
In 2006 after Oman decided it would not join the monetary union. Months later Kuwait severed its currency peg to a then-weak dollar in a bid to fight imported inflation.
And, now except Kuwait all the other members joining the currency union are keen to have the Central Bank in their own country.
There was no official announcement after the two-day Supreme Council meetings but seems most members have agreed to disagree at least on the location of the Central Bank.
As Al Attiyah is optimistic about the decision of the creation of the Central Bank by mid-2009 there will be little time left to work out other details.
When asked about the issue of gold reserve for the GCC Central Bank, Mohammad Al Mazroui, Assistant Secretary General for Economic Affairs, told Gulf News that the time had not come for discussing about the gold reserves. "Let's first decide the location of the Central Bank then the Monetary Council and Bank will deal with the issue of gold reserve."
Gus Freeman, Managing Director of Arabian Research Bureau, said the deferring of decisions on some of the economic integration issues was prudent in the given circumstances of global recession. "Wait and watch is better than rushing and it is only a matter of time before the single GCC currency, a common power grid and railways," he believes.
A financial expert and former Omani envoy to France believes that the GCC leaders have taken steady and sure steps towards the economic integration. "This is a natural progression of the movement that started three decades ago and we have to be one strong group to be counted internationally," said Munir Makki, Managing Director and President of Fincorp, Oman's leading financial and brokerage company.
Makki, who was Oman's ambassador to France and other European countries for over two decades, pointed out that even in Europe they took a long time to form the European Union.
http://www.gulfnews.com/business/Economy/10271599.html
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